Asian stocks mostly held their ground Friday while a dollar gauge hovered near a record high ahead of key US jobs data that could stir expectations for another sharp Federal Reserve interest-rate hike.
(Bloomberg) — Asian stocks mostly held their ground Friday while a dollar gauge hovered near a record high ahead of key US jobs data that could stir expectations for another sharp Federal Reserve interest-rate hike.
Shares retreated in Japan, rose in South Korea and were mixed in Australia. US futures wavered after Wall Street snapped a four-day losing streak despite a slide in chip stocks on concerns that new US rules imperil exports to China.
The jobs update Friday is expected to show healthy payrolls growth and follows a stronger-than-expected US manufacturing report. Traders increasingly anticipate another large 75 basis points Fed rate rise to cool inflation.
The two-year Treasury yield was at the highest since 2007 against that backdrop, while the Bloomberg Dollar Spot Index inched back from the unprecedented level hit Thursday. The yen, the euro and commodity-linked currencies strengthened.
Oil bounced above $87 a barrel, undoing some of the losses sparked by China’s move to lock down the metropolis of Chengdu to curb Covid. The latter step amplified worries about the commodity demand outlook.
Global shares are set for their worst week since June, roiled by ebbing bets on tempered Fed tightening after US central bank officials made it clear they see the need for restrictive monetary settings for some time. While economic growth risks abound, the equity slide might encourage some dip buying.
“We don’t have a lot of reasons to be bullish in this type of environment for the next couple of weeks and months,” Meera Pandit, global market strategist at JPMorgan Asset Management, said on Bloomberg Television. “Yet when we think about the longer term perspective and the longer term investor, these are the types of level that can be fruitful in the long run.”
US data showed manufacturing growth steadied in August and that a measure of materials costs fell for a fifth month in a sign of easing inflation pressures.
The payrolls report later Friday is projected to show a 298,000 gain and solid wage growth. Federal Reserve Bank of Atlanta President Raphael Bostic said there’s still some work to do to contain price pressures.
Here are some key events to watch this week:
- ECB Governing Council members due to speak at event Tuesday through Sept. 2
- US nonfarm payrolls, Friday
- UK leadership ballot closes Friday. Winner announced Sept. 5
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Some of the main moves in markets:
Stocks
- S&P 500 futures fell 0.1% as of 9:37 a.m. in Tokyo. The S&P 500 rose 0.3%
- Nasdaq 100 futures were steady. The Nasdaq 100 was little changed
- Japan’s Topix index dropped 0.5%
- Australia’s S&P/ASX 200 index fell 0.2%
- South Korea’s Kospi index added 0.3%
Currencies
- The Bloomberg Dollar Spot Index fell 0.1%
- The euro was at $0.9958, up 0.1%
- The Japanese yen was at 139.90 per dollar, up 0.2%
- The offshore yuan was at 6.9109 per dollar, up 0.1%
Bonds
- The yield on 10-year Treasuries held at 3.25%
- Australia’s 10-year yield was at 3.69%
Commodities
- West Texas Intermediate crude rose 1.2% to $87.62 a barrel
- Gold was at $1,699.16 an ounce, up 0.1%
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